Jan Brodec | Charles University Faculty of Law, Prague - Václav Janeček | Charles University Faculty of Law, Prague

Invalidity of Legal Transaction That Is Contrary to the Act on Public Contracts

Jurisprudence 4/2015 Section: Articles Page: 3-9

Keywords: public procurement, ineffectiveness, invalidity, sanction, speciality, restrictive interpretation

Abstract: According to the recent prevailing case law and academic literature the fact that the Act on Public Contracts (APC) is special (lex specialis) to the Civil Code (CC) implies that any transaction that is contrary to the APC cannot be subjected to the general provisions on invalidity under the CC. In practice, many offences then cannot be effectively sanctioned. The authors therefore ask whether such an approach is justified. Based on detailed reasoning and interpretation of the European and Czech law they revise the prevailing view and show that, on the contrary, the general provisions of the CC on invalidity of legal transactions are to be applied in some cases (e.g. when granting full power contrary to the APC). The common feature is that the Office for the Protection of Competition cannot impose the prohibition to perform the contract in these cases. The authors claim that the sanction of invalidity under the APC should be interpreted restrictively.